How Worthless is Your 401(k)?

The 401K program was the engine that fueled the growth of the 90's. Not everyone took a bath on their 401. I didn't, mine has grown at 4% the last two years. I also didn't ever get the double digit gains that were the norm for most. Big risk always precedes big gains. We shouldn't be scrapping the concept. Everything is cyclical. After the upcoming collapse of the government and our financial system there will be opportunity again.

There is a very simple, single change to 401(k) law that would remedy many of these problems: Permit employees to "rollout" tax-free any or all 401(k) funds once per year during a "rollout period" to any retirement account into which they would be permitted a tax-free rollover at the end of an employment relationship. This would immediately free employees from fee-laden plans and give them more control over their retirement while encouraging such plans through free market forces to be more competitive.

Great article. Concurrent with 401(k) reform, we need to educate the country's financial advisors better. First thing to change is the Series 7 exam - a useless tool wrt risk management. Second, teach them the truth about finance and risk management and get them to stop focusing on "gathering assets." It neuters them from being more proactive. You can time the market.